Kazakhstan: Waiting for Change

Asia Report N°25030 Sep 2013

EXECUTIVE SUMMARY

Kazakhstan has long been viewed from the outside as the most prosperous and stable country in a region widely regarded as fragile and dysfunctional. The appearance of wealth, based largely on the conspicuous consumption of Almaty and Astana, its main cities, and multi-billion-dollar energy contracts – increasingly with China – hides, however, a multitude of challenges. An ageing authoritarian leader with no designated successor, labour unrest, growing Islamism, corruption, and a state apparatus that, when confronted even with limited security challenges, seems hard-pressed to respond, all indicate that the Kazakh state is not as robust as it first appears. Without a significant effort to push forward with repeatedly promised political, social and economic reforms, Kazakhstan risks becoming just another Central Asian authoritarian regime that squandered the advantages bestowed on it by abundant natural resources.

The core issue, which few in the ruling elite seem inclined to discuss, is succession. 73-year-old Nursultan Nazarbayev has led the country since independence in 1991. The mere passage of time suggests his exit might not be far off. Yet there is no indication of a succession strategy. A cult of personality has grown up around him. Parliament is weak. Not once has the Organisation for Security and Cooperation in Europe (OSCE) declared a Kazakh election to be free and fair. Recent laws have curbed political freedoms and censored the media, marking a return to authoritarian tactics. Nazarbayev’s successor will inherit a mixed legacy, including wealthy elites with assets to protect and a population who increasingly feel the government has delivered little in the way of political representation or economic prosperity. Events in Janaozen in December 2011 when police opened fire on striking oil workers demonstrated that the authorities’ response to dissent can be alarmingly disproportionate.

Kazakhstan’s petroleum and mineral wealth will not protect the government from a growing tide of domestic resentment, nor can it insulate the country from potential external unrest. To its south a collection of failing states and authoritarian regimes – the largest of which, Uzbekistan, is also facing a succession scenario even more complex than Astana’s – is the only buffer between Kazakhstan and Afghanistan. The 2014 U.S. and NATO drawdown poses a significant regional security challenge.

Some Kazakh defence chiefs have voiced concerns about the country’s readiness; in contrast, the president’s office is pointedly more optimistic. But beyond involvement with security blocs such as the Collective Security Treaty Organization (CSTO) and the Shanghai Cooperation Organisation (SCO), Kazakhstan does not appear to have a plan. There are also indications that Kazakh Islamist extremists, trained in Afghanistan and Pakistan, are hoping to bring the struggle home. In the western regions, growing numbers of marginalised youths are turning to Islam as a means of political expression and a source of identity distinct from the venality they associate with the ruling classes.

Foreign investment in oil, gas and minerals provides Kazakhstan with a layer of respectability and the funds needed to project a harmonious and tolerant image on the international stage. But Nazarbayev’s policy of economic progress first and political reform second is failing to extend wealth beyond Almaty and Astana. Nor has it fostered a system of local and regional government capable of promoting nationwide social renewal. Large areas of the country struggle with inadequate services and antiquated utilities. Socio-economic inequalities are feeding discontent.

The Kazakh economy is increasingly state-controlled and viewed as corrupt. When the banking system nearly collapsed in 2008, the government reverted to Soviet-style measures, buying up troubled institutions and reversing more than a decade’s worth of market reforms. Many investors, formerly upbeat, wonder if failure to handle even relatively minor security threats reflects a deep-seated malaise. Others suggest the government’s commitment to a transparent business environment is hesitant at best and note that the trend toward state ownership in the economy mirrors a wider attempt by the government to consolidate control across society.

To preserve stability and avoid a catastrophic succession scenario, Astana should tackle corruption; invest more in impoverished regions as well as in basic infrastructure and social services; open up democratic space; and ease oppressive law and order practices. But if the past is prologue this may be unlikely to happen any time soon. At the very least, though, the Kazakh elites’ sense of survival will want them to ensure a smooth transition into a post-Nazarbayev era. Presumably, this is what its powerful neighbours, China and Russia, would also want. Every effort should be made to encourage Nazarbayev to swiftly put in place and explain what his succession policy is. At the same time, the West should encourage greater compliance with its international treaty obligations to respect basic civil and political rights: without meaningful progress here, Kazakhstan’s candidacy for a non-permanent seat on the UN Security Council for 2017-2018 should be made to run aground at the earliest opportunity.